by Gary Alexander

November 21, 2023

If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment.”

– Marcus Aurelius (121-180 CE), Roman Emperor and Stoic philosopher

Where were you 60 years ago tomorrow? Chances are that everyone over 70 remembers that day very well, chillingly well. I was a freshman deep into a two-hour Friday morning class titled “Principles of Living,” taught by the 71-year-old Chancellor of a small Southern California liberal arts college, and we were deep into studying Stoics and Manicheans, when his ‘hot line’ in the back of the room jingled loudly.

He was an authoritarian captain of that college ship, so he bellowed, “My secretary is under strict orders not to call here unless it’s an emergency,” so he strode back and answered the phone brusquely. He was quiet for a good minute. Then, we only heard his side of the conversation, in these words I’ll never forget:

“The President, shot? The Governor, too? Did they survive? Well (angrily), call me when you are sure!”

Then, he went back to dissecting the Manichean philosophy for 45 tense minutes before his, presumably terrified, secretary had all the facts and called back. All he said was, “OK, I presume the Vice President is sworn in.” This was about 11:30 am, Pacific time, and he went on teaching ancient philosophy for another 20+ minutes as we sweated out our horror in furtive whispers, afraid to ask the Chancellor for more facts.

In retrospect, that two-hour class was a real-life lesson in Stoicism: Maintaining fortitude in adversity and repressing our emotions to the point of seeming indifferent to pain. Finally, at 11:55am, as class neared its end, he said, “The President was shot in Dallas. He is dead, and the Vice President is sworn in,” and so he dismissed us. We 18-year-olds were shell-shocked. Mercifully, all our afternoon classes were cancelled.

That was a major tragedy that scarred a generation – like the Great Depression and Pearl Harbor scarred our parents’ generation – but the stock market took the news somewhat like our Chancellor did – in stride.

After Pearl Harbor mobilized a nation in unity to fight two enemies across two broad oceans, JFK’s death split us apart, dividing us, much like today. The Vietnam War waxed while the Peace Corps waned. Crew cuts grew into long hair. Campus riots trumped studying, and the Beatles drowned out the Beach Boys.

There have been five major external shocks in the last century, each one changing us as a nation, but not changing the stock market much, as if Wall Street were run by Stoic philosophers, well above the fray.

The Last Five Major Generational Shocks – and the Market’s Reaction

Shock 1: The Attack on Pearl Harbor (December 7, 1941)            

For those dubbed “The Greatest Generation” (born 1901-1927) and some born early in the “Silent Generation,” Japan’s sudden attack on Pearl Harbor was the major shock of their lifetime, rallying a mostly isolationist nation into unified war fever on two fronts – but the Dow only dipped briefly.

The attack came on a Sunday morning. The Dow fell just 1.6% on Monday, and it fell 6.5% through December 10, 1941, but the Dow then rebounded after a month, for a gain of +3.8%.  The Dow then resumed its downdraft until April, when it turned around after the first piece of good war news – Jimmy Doolittle’s surprise bombing raid over Tokyo on April 18, 1942. The Dow bottomed out at 92.92 on April 28, 1942, and then began rising strongly after America’s surprise victories in the Coral Sea (May 4-8, 1942) and then at Midway (June 4-7). The Dow rose 128.7% from April 28, 1942, to May 29, 1946.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

For the Silent Generation and early Baby Boomers, the biggest life shock came with the assassination of John F. Kennedy. The market initially declined, and was closed that Friday afternoon, but when it opened after the President’s funeral, the S&P was already above where it was the day before the President was shot, and the market continued rising through the mid-1960s, with an 85% gain from 1962 to early 1966.

For Generation X (born 1965 to 1980), the most traumatic single moment in their young life was likely the sudden explosion of the Challenger spacecraft after just 73 seconds soaring into the Florida sky, killing all seven astronauts, and effectively dampening our nation’s enthusiasm for space exploration.  But the Dow rose 2.7% that week and it rose 150% from July 24, 1984, to August 25, 1987.  As for the S&P:

For Millennials (born (1981 to 1996), the signal event of their youth was the Attack on America on 9/11, 2001, and the national paranoia which followed. Although the market was closed for nearly a week, the S&P 500 reached its old high within a month – closing five points higher one month after that fateful day.

Looking at the Dow, it took nearly two months to recover, but the Dow was up 10% after six months.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

For Generation Z (born after 1997), and many others, the biggest recent shock was COVID-19, which seemed to strike like these other events, in a day, or a week at most. On Sunday night, March 15, the Federal Reserve, in an emergency meeting, cut the Fed Funds rate by a full 1%, to zero, but the Dow still fell over 3,000 points the next day, as one state after another locked down nearly all businesses that week.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The Ides of March 2020 led to a record-fast drop, followed by a record-fast recovery (+20% in three days).

We’ve seen the same trend after several other traumas since 1950. For instance, the young S&P 500 index rose by double digits in each Korean War year: 1950 (+21.8%), 1951 (+16.5%) and 1952 (+11.8%).

  • When America first heard about the Cuban Missile Crisis, on October 22, 1962, the S&P was at 55. Its low point that week was 53.5 (down just 2.7%) and the market closed October, up.
  • When the first Gulf War broke out on January 17, 1991, the Dow rose 4.6% that day and +17% within a month. When the U.S. invaded Iraq in the week of March 17-21, 2003, the S&P 500 rose 8.43%
  • When terrorists first bombed the World Trade Center on February 26, 1993, the S&P closed up that day, and it was up 2.1% that week.

This does not mean those events are positive – they are all quite horrible – but the market responds more to the economy, business news and earnings, not to external events – no matter how dramatic they seem.

You can interpret this survey as a plea to tear down your Wall of Worry, or become a Stoic, like Marcus Aurelius, who was a Roman Emperor, not just a philosopher. (Maybe we could find a President like him!)


All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

About The Author

Gary Alexander

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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